East Delta University

Assignment
Course Title Principles of  Macroeconomics Course Code ECO 202

Program BBA Section 2

1. 201008002
1. Kazi Nabila Tasnim
Students’ Name 2. Saadmaan Khourshed Student ID 2. 201006302
3. Nuzhat Mahjabeen 3. 201000502

Assignment Assignment
15 1
Weight No

Submission 8/11/2021
Instructor Ananya Nandy
Deadline:

Assignment Title Performance in terms of economic indicators among different

regional groups of World Bank

Disclosure:
We declare that this assignment is entirely our own work and we have acknowledged all the
materials used from the published or unpublished works of other people. All references have
been duly cited.

1
Job Roster:

Student’s Name Student ID Selected Country

Kazi Nabila Tasnim 201008002 Netherlands

Saadmaan Khourshed 201006302 Norway

Nuzhat Mahjabeen 201000502 Germany

2
Introduction
Economic Indicators are vital to assess the economic performance and well-being of a country.

An economic indicator is an element of economic statistics, particularly on a macroeconomic

degree, that strategists use to understand existing or potential investment opportunities

(BARONE, 2021). These indicators may also be used to evaluate an economy's overall health.

Economic indicators are classified into groups or categories. Almost all of these economic

indicators have a fixed publication plan which allows investors to anticipate and plan for

particular data at specified times of the year.

This reflects the circumstances of a nation in terms of production, output of an economy,

Government, or any other sectors which assist in judging the current position of the nation and

also helps to identify the efforts that need to be put the country in improving the sectors where

the economic health is not sound.

The three countries that have been selected from the region Europe and Central Asia are

Germany, Norway and Netherlands respectively. The mentioned categories in the World Bank

data are Growth and Economic Structure, Income and Savings, Balance of payments, Prices and

terms of Trade, and Labor and Productivity from which the chosen indicators are GDP (current

US$), GNI per capita, Atlas method (current US$), Personal remittances, received (% of GDP),

Consumer price index and GDP per person employed.

For further study on the economic performance of Germany, Norway and Netherlands the

economic growth, unemployment rate, inflation rate and the business cycle are discussed.

3
Since GDP is not an effective measurement of an economic well being, the two alternative

indicators that were chosen are: Genuine Savings (Adjusted Net Savings) by World Bank and

Human Development Index (HDI).

GDP (current US$)

The gross domestic product (GDP) is a financial indicator of the market value of all final

products and services generated over a particular span of period.). It is a metric that measures all

of the products generated within a country's borders. GDP is made up of commodities and

services produced for market sale as well as certain non-market production, such as government

provided defense and education services.

The GDP (current US$) of the 3 selected countries is given as follows:

Source: ("GDP (current US$) - Norway, Germany, Netherlands | Data", 2021)

4
Comparison:

Gross domestic product (GDP) has traditionally been used by economists to gauge economic

success. In the graph, we can see that Germany had the highest GDP from 2015 to 2019 when

compared to Norway and the Netherlands. In comparison to the Netherlands, Norway is slightly

higher. Since Germany has the largest GDP, this indicates that the economy is strong and the

country is progressing. On the other hand, the economies of Norway and the Netherlands might

well be losing territory as their Gross Domestic Product (GDP) falls behind Germany's. Higher

GDP should, in certain ways, prompt expanded human progress because it indicates the creation

of more useful commodities and services. A recession is usually defined by two quarters in a row

of declining GDP (SMITH, 2021).

Nevertheless, it's also undeniable that GDP doesn't do a sufficient job of capturing this traditional

economic value.

5
GNI per capita, Atlas method (current US$)
The GNI per capita is calculated by dividing a country's annual final income by its population. It

should be based on a country's residents' average pre-tax income.

The GNI per capita, Atlas method (current US$) of the 3 selected countries is given as follows:

Source: ("GNI per capita, Atlas method (current US$) - Norway, Germany, Netherlands | Data", 2021)

Comparison:

The World Bank divides the world's economies into four categories (Fleming, 2020). The

fundamental indicator of a nation’s wealth and how it falls in the four categories has always been

its gross national income (GNI) per capita. According to the 2019 threshold levels for all four

categories, all three countries fall into the High Income category, since they all generate more

than $12,375.

Although GNI per capita doesn't quite totally and utterly clarify a country's stage of progress or

quantify wellbeing, it has proven to be a valuable and widely available indicator that is strongly

6
associated with certain other, nonfinancial measures of living standards, such as the country's as

well as its people's social, financial, and environmental health.

Personal Remittances, Received

The total of individual transfers and employee remuneration is referred to as personal

remittances. Personal transfers are all current funds or in-kind transactions between residents and

nonresidents, regardless of the giver's means of revenue or the connection between both the

households.

The Personal remittance, received of the 3 selected countries is given as follows:

Source: ("Personal remittances, received (% of GDP) - Norway, Germany, Netherlands | Data", 2021)

7
Comparison:

From 2015 to 2019, Germany has the highest personal remittance, $0.69895. The Netherlands

has personal remittance of $0.248033 and Norway has the least personal remittance, $0.152067.

These data indicate, households in Germany have the highest wellbeing as their living conditions

have improved. Higher remittance of Germany can have improved sanitary conditions, healthier

lifestyles, appropriate healthcare, and higher educational attainment can all help to increase

human capital accumulation. Unbanked households in impoverished rural regions might benefit

from remittances through easing credit limitations, facilitating asset accumulation and business

investments, promoting financial literacy, and reducing poverty. However, due to the lowest

personal remittance among these three countries, Norway will not have any shortage of labor.

Furthermore, Norway is more independent from funds of other countries.

Consumer Price Index

The Consumer Price Index (CPI) is a measurement of change in urban consumers' prices for a

market basket of goods and services across time. The CPI is the most generally used metric of

inflation, and it is sometimes used as a gauge of government economic policy efficacy. It offers

government, business, labor, and private citizens information regarding price changes in the

economy, which they use as a framework for making economic decisions. In furthermore, the

CPI is used by the President, Congress, and the Federal Reserve Board to help them formulate

fiscal and monetary policy.

8
The Consumer price index of the 3 selected countries is given as follows:

Source: ("Consumer price index (2010 = 100) - Norway, Germany, Netherlands | Data", 2021)

Comparison:

From 2015 to 2019, the consumer price index has increased in Germany, Netherland and

Norway. However, Norway has the highest consumer price index at $120.27. Though in 2015,

Nether land had the highest CPI, $109.18. As a result, it shows Norway has the highest economic

stability and financial steadiness. Also, citizens of Norway have the highest purchasing power

and they will pay the most taxes for a higher consumer price index. However, Norway also has

the highest inflation and greater substitution effect. So citizens of Norway will have to purchase

their daily goods at a higher rate.

9
GDP per Person Employed
Gross domestic product (GDP) measured by total income and employment equals GDP per

person working.

The GDP per person employed of the 3 selected countries is given as follows:

Source- ("GDP per person employed (constant 2017 PPP $) - Norway, Germany, Netherlands | Data", 2021)

Comparison:

From 2015 to 2019, Norway has maintained the highest GDP per person employed, $126466.21.

Germany and the Netherlands have $105231.33 and $108741 respectively. As a result, Norway

has the highest GDP per person employed and it also has the highest labor hour output involved

in its production. It reflects that Norway has the highest combined effects of a number of factors,

including technological advancements, capital investment, capacity, energy, and material

10
utilization, the use of purchased services inputs, such as contract employment services,

production organization, and managerial skill, as well as the characteristics and effort of the

workplace. Moreover, it also shows that Norway has the highest productivity for a longer period.

Economic Growth

When comparing one period of time to the next, economic growth is defined as a rise in the

production of economic commodities and services. It can be expressed in both nominal and real

terms. Although other metrics are sometimes employed, aggregate economic growth is

traditionally quantified in terms of gross national product (GNP) or gross domestic product

(GDP).

The Economic growth of the 3 selected countries is given as follows:

Source- ("GDP per capita (current US$) - Norway, Germany, Netherlands | Data", 2021)

11
Comparison:

To measure the economic growth of Germany, Norway and the Netherlands, GDP per capita is

taken into account to quantify the output that a person has given economically in a nation. The

graph above shows the economic growth of Germany, Norway and the Netherlands from the year

2018 to 2019. From the graph, we can observe that the economic growth of Germany is higher

than Norway and the Netherlands. Surprisingly, all the countries had a rise in their economic

growth which indicates that these countries were economically prospering in the year 2018.

However, the Netherlands has a much slower steady growth in comparison to Germany and

Norway. On the contrary, Germany has higher steady growth which is clearly depicted in the

graph. Also, the graph shows that the year 2019 has seen a decline in economic growth in all

these countries. Besides, the economic growth of Norway has fluctuated the most from 2015 to

2019. In conclusion, we can say that Germany is performing much better than Norway and

Netherland in terms of economic growth.

12
Unemployment Rate
Unemployment rate is the percentage of the labor force who is no longer engaged in any

economic activity. This portion of the labor force alludes to the unemployed people of a country

who are currently jobless but can be in search of employment opportunities.

The unemployment rate of the 3 selected countries is given as follows:

Source- ("Unemployment, total (% of total labor force) (modeled ILO estimate) - Norway, Germany, Netherlands |
Data", 2021)

Comparison:

The graph depicts the unemployment rate Unemployment, total (% of total labor force) modeled

ILO estimate of Germany, Norway and Netherlands from the year 2015 to 2019. From the

graph, we can see that the rate of unemployment of Germany, Norway and Netherland was the

highest in the year 2015 and was the lowest in 2019. Additionally, all the three countries

13
decreased their unemployment rate within these 5 years which means that Germany, Norway and

Netherlands have worked on creating employment opportunities in order to employ their people

in various economic activities. However, the Netherlands has lowered almost half of the

unemployment rate from 2015 to 2019 which explains that Netherlands has put much of their

effort to improve the unemployment issue of the country.

Inflation Rate
Inflation rate is the rate at which the value of a country reduces and the price for goods and

services increases for which the purchasing power of people decreases. Inflation takes place in a

nation when supply exceeds the demand or when the government prints too much money.

The Inflation rate of the 3 selected countries is given as follows:

Source- ("Inflation, consumer prices (annual %) - Norway, Germany, Netherlands | Data", 2021)

14
Comparison:

The graph above exhibits the inflation rate of Germany, Norway and Netherland from the year

2015 to 2019. Here, the inflation rate was measured by the consumer price index. From the

graph, we can see that the inflation rate of Norway was higher in 2015 but Germany and

Netherlands had the lowest inflation rate in the year 2105. In addition, Germany and Norway

had a decline in inflation rate from 2018 to 2019. Conversely, the inflation rate of the

Netherlands rose from 2018 to 2019. However, the graph also shows that all three countries had

a rise in inflation rate from 2015 to 2019.

Business Cycle
Business Cycle is a cycle that comprises expansions and contractions depicting the change of

economic activity in each phase. Also, the business cycle is formed based upon the GDP growth

rates. Each business cycle consists of four phases which are the following: (i) Expansion (ii)

Peak (iii) Contraction and (iv) Trough. Again, expansion has two stages (a) Recovery and (b)

Prosperity. Similarly, the two stages in contraction are (a) Recession and (Depression)

(i) Expansion:

This phase lies between the trough and the peak which is the most desirable phase of the

economy. In this phase, there’s a rise in economic activities followed by the increment of profits

and decrease of unemployment rate.

15
(ii) Peak:

The climax of all economic activities is found at this phase which indicates that production and

prices have increased to the point where there’s no room for improvement and growth. This is an

indication that all economic activities will start to decline.

(iii) Contraction:

During this phase, economic growth starts to reduce because of the fall of GDP growth, high rate

of unemployment and the weakening of all economic activities. This is the phase where

recession takes place for all the reasons stated above.

(iv) Trough:

The lowest phase in the entire business cycle is Trough when the contraction period hits the

bottom and then after that, the expansion begins.

Netherlands:

Source: ("GDP growth (annual %) - Netherlands | Data", 2021)

16
Germany:

Source: ("GDP growth (annual %) - Germany | Data", 2021)

Norway:

Source: ("GDP growth (annual %) - Norway | Data", 2021)

17
Comparison:

There are three graphs given above which show the business cycles of Netherlands, Germany

and Norway from the year 2015 to 2019. In the year 2015, Netherlands was going through a

trough phase whereas Germany was at the prosperity stage in expansion phase. Meanwhile,

Norway had a recession in 2015. However, all three countries were at the peak phase which

means that economic activities were thriving at this stage. But after 2017, Netherlands, Germany

and Norway began their contraction phase indicating that economic growth was gradually

declining. Again, in the year 2019, all three countries were in a tough phase at the same time.

Studying these three graphs, we can conclude that the business cycle of Germany is better than

Netherlands and Norway as the straight path along the curve is much more stable in comparison

to the other two countries.

Human Development Index (HDI)

Mahbub Ul Haq, a Pakistani economist, established the Human Progress Index (HDI), a

statistical method that was subsequently utilized by the United Nations Development Programme

(UNDP) for gauging country progression. The HDI is a metric that assesses a country's progress

based on factors such as average lifespan, literacy rate (education), and income per capita. It is

acknowledged as one of the best measures of a nation's growth because it includes all of the

major indicators required to evaluate economic and social development. The Human

Development Index (HDI) is a metric that assesses a country's average outcomes in three key

areas of human development: health, knowledge, and income.

18
Comparison:

From the graphic, it can be observed that all of the chosen courtiers have maintained a consistent

HDI value between 2015 and 2019. Although Norway has the greatest HDI in comparison, the

disparities in HDI across these economies aren't significant. The data obtained indicates

situations, such as health, standard of living, and literacy etc. are improving in these countries.

Adjusted Net Savings (ANS)

Adjusted net saving, commonly known as genuine saving, is a metric that uses expanded national

accounts ideas to evaluate a country's economic long-term viability. Adjusted net saving (ANS)

quantifies the genuine percentage of savings inside an economy after accounting for human

capital investments, resource depletion, and pollution-related harms.

19
Source: ("Adjusted net savings, including particulate emission damage (% of GNI) - Netherlands, Germany, Norway

| Data", 2021)

Comparison:

Taking capital gains out of the equation, The change in value of a specific set of assets is

measured by adjusted net saving. As a result, if a country's net saving increases, the current

worth of social assistance increases as well. A sustained downturn, on the other hand, implies a

fragile economy. We can see from the graph that Germany has the largest ANS, which slightly

slowed in 2016, then gradually increased in 2017 and 2018, before slightly decreasing in 2019.

Norway and the Netherlands both followed this pattern in a similar way. However, Norway has

elevated ANS than the Netherlands.

20
 Reference

Adjusted net savings, including particulate emission damage (% of GNI) - Netherlands,

Germany, Norway | Data. Data.worldbank.org. (2021). Retrieved 8 November 2021,

from

https://data.worldbank.org/indicator/NY.ADJ.SVNG.GN.ZS?end=2019&locations=NL-D

E-NO&start=2015.

BARONE, A. (2021). Economic Indicator. Investopedia. Retrieved 8 November 2021, from

https://www.investopedia.com/terms/e/economic_indicator.asp.

Consumer price index (2010 = 100) - Norway, Germany, Netherlands | Data.

Data.worldbank.org. (2021). Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/FP.CPI.TOTL?end=2019&locations=NO-DE-NL&st

art=2015.

GDP (current US$) - Norway, Germany, Netherlands | Data. Data.worldbank.org. (2021).

Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2019&locations=NO-DE-

NL&start=2005.

GDP growth (annual %) - Germany | Data. (2021). Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2019&locations=DE&

start=2015

21
GDP growth (annual %) - Netherlands | Data. Data.worldbank.org. (2021). Retrieved 8

November 2021, from

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=NL.

GDP growth (annual %) - Norway | Data. (2021). Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2019&locations=NO&

start=2015

GDP per person employed (constant 2017 PPP $) - Norway, Germany, Netherlands | Data.

(2021). Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/SL.GDP.PCAP.EM.KD?end=2019&locations=NO-D

E-NL&start=2015

GNI per capita, Atlas method (current US$) - Norway, Germany, Netherlands | Data.

Data.worldbank.org. (2021). Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?end=2019&locations=NO-DE-N

L&start=2015.

Inflation, consumer prices (annual %) - Norway, Germany, Netherlands | Data. (2021). Retrieved

8 November 2021, from

https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?end=2019&locations=NO-DE-N

L&start=2015

Personal remittances, received (% of GDP) - Norway, Germany, Netherlands | Data.

Data.worldbank.org. (2021). Retrieved 8 November 2021, from

22
 https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?end=2019&locations=N

O-DE-NL&start=2015.

SMITH, L. (2021). Does High GDP Mean Economic Prosperity?. Investopedia. Retrieved 7

November 2021, from

https://www.investopedia.com/articles/economics/08/genuine-progress-indicator-gpi.asp.

Unemployment, total (% of total labor force) (modeled ILO estimate) - Norway, Germany,

Netherlands | Data. (2021). Retrieved 8 November 2021, from

https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?end=2019&locations=NO-DE-

NL&start=2015

23